US coal producers shaved production costs further in challenging 2014

Production costs for a handful of U.S. coal producers declined in 2014, but some Illinois Basin producers actually reported higher costs, according to a cost-of-coal-sales-per-ton analysis by SNL Energy.

After a dramatic rise in the cost of coal sales per ton from 2009 to 2012, increasing an average of 38.9% for the period, the industry saw costs level out in 2013, with a few producers continuing to benefit from cost-cutting measures in 2014.

Only Alpha Natural Resources Inc. reported a significant drop in costs in 2014 at nearly $40 a ton, down 12.7% from 2013, but still shy of the company's 2009 rate of $34.26 per ton.

Alpha's reduction came as a result of a strong cost performance in the East during 2014, according to Chairman and CEO Kevin Crutchfield, who predicted further cost savings through the rest of this year in an earnings report in February.